Ukraine may receive financial support from the European Union only if it meets new, stricter tax obligations. This concerns a macro-financial assistance package that includes the allocation of 8.4 billion euros in 2026, but the European Commission is considering linking payments to significant changes in the country’s tax system.
This is reported by Finway
New tax requirements and their impact on Ukrainian business
According to information from European sources, the EU insists on revising the current simplified taxation system used by many Ukrainian entrepreneurs. This system allows certain categories of businesses to pay only 5% of their total revenue, which, according to donors and the Ministry of Finance of Ukraine, leads to reduced budget revenues, competition violations, and the expansion of the shadow economy.
Possible changes include the introduction of a 20% value-added tax (VAT) for companies currently operating under preferential conditions if their annual income exceeds 4 million UAH. According to estimates by the Ministry of Finance, such changes could bring over 40 billion UAH to the state budget annually.
Conditions for aid and coordination with the IMF
The European Commission is currently finalizing a memorandum of understanding that will define the exact conditions for financing for Ukraine. The EU emphasizes that their reform program aligns with the recommendations of the International Monetary Fund.
“The goal is to complete negotiations on an ‘ambitious reform program’ as soon as possible, which aims to strengthen Ukraine’s economy and accelerate its integration into the EU.”
At the same time, Ukraine is conducting separate negotiations with the IMF, which also insists on implementing tax innovations. The Fund specifically requires the introduction of VAT for self-employed entrepreneurs and a review of the taxation of certain international postal shipments. Kyiv has already missed the deadline for meeting some of the requirements in March and now has until June, when the next IMF program review will take place.
The next tranche from the IMF, amounting to about 700 million dollars, also remains in question. According to sources, Ukrainian officials have attempted to negotiate a postponement of the implementation of certain tax changes by about a year.
Implementing new tax rules may be politically challenging, as tax reforms remain unpopular among the population and the business community. Earlier, the Verkhovna Rada refused to support part of the IMF’s tax requirements, leading to increased tensions between the parliament, the government, and the President’s Office.